Gold etf taxation after 1 yr (URGENT)

[ron94]

Pls clarify if I sell gold etf after 1 yr, what is the tax applicable. Can the gain from gold etf be set off against losses from equity?

[Jack_R]

@ron94

Pls clarify if I sell gold etf after 1 yr, what is the tax applicable. Can the gain from gold etf be set off against losses from equity?

• The sale is considered long-term capital gains (LTCG).

• LTCG from gold ETFs held for more than 12 months is taxed at a flat 12.5% without indexation benefit (i.e., no inflation adjustment)

• Short-term losses from gold ETFs can be set off against any capital gains including equity gains.

• Long-term losses from gold ETFs can only be set off against long-term capital gains from other non-equity assets such as debt funds, gold ETFs, etc. They cannot be set off against long-term capital gains from equity

[ron94]

@Quicko can you pls confirm this?

[drsennath]

For gold etf holding period for LTCG is 12 or 24 months?

[Jack_R]

It is 12 months on or after 01.04.2025.
Earlier it was 36 months (3 years) but was changed in the last budget.

[Jack_R]

New Income Tax Rules on Sale of Gold ETF & Gold Mutual Funds

[drsennath]

Hi thanks. So gold etf is better than gold mutual funds in regard to taxation.

[BB789]

Only if your income is above exemption/rebates and above 10% bracket. Otherwise STCG is better.

However, most gold mutual funds just invest in their own ETFs. You’ll be paying expense of underlying ETF(say 0.35%)+MF(say 0.15%) extra.

[ron94]

Thanks for your reply. Can you pls share the source where it says that long term loss from equity cannot be set off against long term gain from gold etf?

Also can long term gain from sgb be set off against long term loss from equity?
And what is the holding period for sgb to be considered long term?

[J_R_Dinesh]

@Quicko
Does the ltcg exemption limit of 1.25 lakh applicable for gold etfs as well?

[SG_13]

@J_R_Dinesh

Does the ltcg exemption limit of 1.25 lakh applicable for gold etfs as well?

No, the exemption provided u/s 112A of IT Act (LTCG) is available only w.r.t listed equity shares or units of equity oriented funds.

@Quicko

The ₹1.25L exemption is available only in the case of domestic listed shares and MFs/ETFs that invest in domestic equity. This is specified in section 112A of the Income Tax Act.

The funds mentioned by you are foreign ETFs and track foreign indices. Hence, the exemption will not be available.

Hope this helps!

Since Gold is not equity, the above explanation will apply for all non-equity ETFs/funds, including the international ones.

[Quicko]

Hey @J_R_Dinesh

The ₹1.25 lakh LTCG exemption under Section 112A applies only to equity-oriented funds.
Since Gold ETFs are classified as debt mutual funds, this exemption is not available for them.

[Quicko]

Hello @ron94

Any type of long-term capital loss, whether from equity or non-equity assets, can be set off against any long-term capital gain. There is no restriction in this regard, so long-term losses from non-equity assets can be adjusted against long-term gains from equity and vice versa.

Thank you

[ron94]

@Quicko So capital gains from selling gold etf after 1 yr and sgb after 3 years can be set off against long term loss from equity, contrary to what @Jack_R has mentioned?

[Jack_R]

@Quicko

Any type of long-term capital loss, whether from equity or non-equity assets, can be set off against any long-term capital gain

Quicko’s answer can be correct as the set off answer was from AI. I checked a few sites, no where it is explicitly mentioned than the long term profit set off of non-equity long term profit and vice versa. All sites only say LTCG can be set off against LTCL